Application for declaration of the Mt Newman Railway

Application by Fortescue Metals Group Ltd (FMG) for declaration of a service provided by the Mt Newman and Goldsworthy Railway lines. Under review by the Australian Competition Tribunal.

On 15 June 2004, the Council received an application under Part IIIA of the Trade Practices Act 1974 (Cth) (TPA) from Fortescue Metals Group Ltd (FMG) for declaration of a service provided through the use of part of the Mt Newman Railway and part of the Goldsworthy Railway in the Pilbara, Western Australia. On 15 December 2004, the Council released a decision that the Mt Newman Railway service is capable of being considered further for declaration, while the Goldsworthy Railway service is not because it is part of a production process. A service that constitutes the use of a production process is exempt from declaration under Part IIIA of the Trade Practices Act.

On 11 March 2005, the Council released an issues paper in respect of FMG’s application for declaration of the use of the Mt Newman Railway. Public submissions on the issues paper were received. Some submissions or parts of submissions are not publicly available due to confidentiality issues. The Council received supplementary information from some parties, some which the Council requested. The Council also sought the advice of the ACCC on some issues relevant to this application. All documents are available for download via the left-hand panel at tab 2.

The Council released its draft recommendation on FMG’s application on 4 November 2005 and a copy is available for download via the left-hand panel at tab 3. The Council received four submissions, a further submission from BHP Billiton Iron Ore and an additional modelling submission from BHP Billiton Iron Ore on its draft recommendation. The submissions are available for download via the left-hand panel at tab 4.

The Council engaged independent expert consultants to provide the Council with advice to assist it in its consideration of the material. The report and the responses to this report are also available for download via the left-hand panel at tab 4.

The Council’s final recommendation was provided to the designated Minister on 24 March 2006. In accordance with the TPA the decision maker had 60 days to make a decision. During the course of the decision making period the matter was transferred within the Treasury portfolio from the Parliamentary Secretary to the Hon. Peter Costello, Treasurer.

Pursuant to section 44H(9) of the TPA, the Treasurer was deemed to have made a decision not to declare the service, as the Treasurer did not make a decision on declaration within the 60 day decision making period. The Treasurer's media release is available for download via the left-hand panel at tab 5.

The Council’s Final Recommendation and a summary of the Final Recommendation is also available for download via the left-hand panel at tab 5.

FMG lodged an appeal with the Australian Competition Tribunal on 9 June 2006. On 30 June 2010 the Tribunal affirmed the Treasurer's deemed decision not to declare the service. The public version of the Tribunal's statement of reasons (including the Tribunal's summary) is available for download via the left-hand panel at tab 6.

Both BHP Billiton Iron Ore Pty Ltd and FMG challenged the Council’s findings on whether the Mt Newman Railway (the subject of BHP’s application) and the Goldsworthy Railway (the subject of FMG’s application) are services for the purposes of Part IIIA of the TPA. More information on the Council’s findings on this matter can be found in the Council’s Preliminary Issues: Statement of Reasons dated November 2004, available for download via the left-hand panel at tab 2. On 18 December 2006 judgement was handed down in the Federal Court. The judge dismissed BHP’s application concerning the Mt Newman Railway and, in respect of FMG’s application, found the Goldsworthy Railway to be a service for the purposes of Part IIIA.

BHP appealed the Federal Court decision. The appeal was heard by the Full Federal Court on 30 April 2007. The Full Federal Court delivered its decision on 5 October 2007 with the appeal being dismissed. On 23 October 2007, BHP applied to the High Court for special leave to appeal the decision of the Full Federal Court. The High Court heard and allowed BHP's application for special leave to appeal on 7 March 2008. The High Court heard the appeal on 29 and 30 July 2008 and dismissed the appeal on 24 September 2008.